Bank Negara: Most businesses face higher costs with limited pass-through to consumers
KUALA LUMPUR: Malaysian businesses are facing higher costs, but their ability to pass them on to consumers remains limited as demand, while resilient, is not excessive, Bank Negara Malaysia said.
KUALA LUMPUR: Malaysiak businesses are grappling with higher costs, yet their capacity to transfer these expenses to consumers remains constrained, according to Bank Negara Malaysia. Governor Datuk Seri Abdul Rasheed Ghaffour revealed that nearly 80% of surveyed businesses cited elevated cost pressures as a concern. However, only around half of these businesses indicated they might pass on the additional expenses to consumers, with some anticipating only partial compliance.
Abdul Rasheed explained that demand conditions are impacting businesses' pricing strategies. While demand remains resilient, it is not excessive, which will also affect businesses' pricing decisions based on the cost pass-through. Additionally, government policy support is expected to remain in place, further reducing the likelihood of significant cost pass-through.
Bank Negara anticipates moderate inflation within its forecast range of 1.5% to 2.5% for the year, with the current rate at 1.9% in the second quarter. The central bank is monitoring the effects of rising commodity and food prices, particularly in light of the uncertainty surrounding the Middle East conflict. Abdul Rasheed emphasized the need to assess the potential impact of these price increases on Malaysia's consumer prices.
The central bank remains vigilant about the extent to which higher costs will ultimately be reflected in consumer prices.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
